The private banking arm of the bank logged a slight uptick in its adjusted pre-tax profit for last year.

The private banking arm of UK/Hong Kong-listed HSBC today reported adjusted pre-tax profit of $289 million for 2016, a 1.5 per cent year-on-year increase. Total customer accounts stood at $69.85 billion at the end of last year, against $78.32 billion in 2015.

Retail banking and wealth management logged an adjusted pre-tax profit of $5.3 billion, a 27.6 per cent surge from the level reported in 2015, the banking group said in a statement.

HSBC logged an adjusted pre-tax profit of $19.3 billion last year, a 1.2 per cent year-on-year decrease. The group’s reported profit before tax amounted to $7.1 billion, some 62 per cent lower than the prior year. This decline principally reflected the impact of significant items, most of which had no impact on capital, even though they were material in accounting terms, the bank said. Disposals of businesses, such as in Brazil, imposed a significant one-off cost, the bank said.

For the entire banking group, Europe and Latin America both posted losses when broken down at a regional level, while regions such as Asia, North America, Middle East and North Africa made profits, HSBC said.

The bank said it decided it was wise to write off the remaining goodwill in the European private banking business. Much of this goodwill comes from its purchase of Safra Republic Holdings in 1999.

The restructuring of the global private banking division is largely complete, and although this unit is now smaller than three years ago, it has been reshaped to position for growth, HSBC said.

Commenting on the main results, Douglas Flint, chairman, said HSBC’s core capital position “improved materially” in 2016.

“A change to the regulatory treatment of our associate in mainland China, continued run-off of legacy assets, planned reduction in certain segments of our trading books and inadequately remunerated assets, together with capital released from business disposals, notably our operations in Brazil, drove this improvement,” he said. (Flint referred to HSBC’s withdrawal from Brazil, part of efforts to rationalise its global footprint.)

“This [reduction] created the capacity to return $2.5 billion of capital by way of a share buy-back, which was completed in December. We met our objective of maintaining the annual dividend in respect of the year at $0.51, as indicated at the interim stage,” Flint added.

Stuart Gulliver, group chief executive, said: “2016 was a good year in which we delivered a solid performance from all our global businesses, made better-than-anticipated progress in reducing our cost base, and delivered a total return to shareholders of 36 per cent. We are investing over $2 billion in digital transformation initiatives to improve our offer to customers, and are instigating a further $1 billion buy-back programme reflecting the strength and flexibility of our balance sheet.”